LINDSAY TANNER: The Government welcomes the IMF's latest World Economic Outlook report. It underlines the success of the Government's economic stimulus strategy. It predicts that growth in Australia will be three per cent this year and three and a half per cent next year, which will be well ahead of the average for the developed world, which is to be 2.3 per cent and 2.4 per cent this year and next year. This report demonstrates again that Australia is leading the world in economic recovery, and it illustrates the success of the Government's economic stimulus strategy. I note that the Leader of the Opposition, Tony Abbott, has called for the Government to immediately redraw the remaining stimulus strategy. That will be a recipe for economic disaster. It would cause chaos for countless small businesses and the loss of thousands of jobs. It would mean that major projects, such as upgrades on the Hume Highway, the Pacific Highway, the Bruce Highway, the vital Regional Rail Express Project for Victoria, rail upgrades in South Australia, major projects all around Australia would be cancelled, and that would be devastating for Australia's long-term economic prospects. The stimulus strategy is already gradually winding down. If it were to be withdrawn arbitrarily overnight, that would have a devastating impact on the Australian economy. We are months away from a federal election, and Tony Abbott still has no policies on the Australian economy, no policies for the future of our health system, no policies for the future of our education system and no Budget savings. He's spending most of his time out there riding his bike, swimming in surf carnivals, appearing in all kinds of events, and not doing the work - the serious policy work - that's required to present the Australian people with an alternative strategy that they can decide at the forthcoming election. Tony Abbott's all pectorals and no policies. He would be a giant risk to Australia's economic recovery, and a giant risk to our future prosperity.
QUESTION: Is the Government considering either reducing or cutting the first home owner's grant?
LINDSAY TANNER: The first home owner's grant boost, that was put in place as part of the economic stimulus, has already wound back, and, of course, there is an ongoing first home owner's grant that stays in place, and we have no plans to alter that. There was a very substantial boost, as part of the stimulus strategy, in order to ensure that economic activity, particularly in the construction sector, was maintained in a period of enormous global downturn. That is now over and it has been a significant part of the success of the stimulus strategy.
QUESTION: Do you think that this IMF report into growth impact and ease pressures on your planning of the Budget?
LINDSAY TANNER: We'll see on Budget night what the forecasts for the Australian Government are with respect to future economic growth and the overall Budget figures. But I note that there have been some wild and massively overstated suggestions from some commentators about improvements in government revenue. There are a range of reasons why these suggestions are way off the mark. Obviously, we hope for a strengthening of our revenue position. The global financial crisis punched a huge hole in the Budget, and we now face a very big challenge to get the Budget back into surplus as quickly as possible. But the kind of suggestions that have been floated in recent times, we believe, are way off the mark. There are a range of factors that mean that the recovery in our revenue is caused by any improvement in economic growth will inevitably be much, much slower than some people would have you believe.
QUESTION: So the Government has no plans in raising the GST?
LINDSAY TANNER: We've certainly got no intention of raising the GST.
QUESTION: Will you have to take a bit of an axe to government spending in the Budget to pay for all this extra money that you've thrown at the states in health reform?
LINDSAY TANNER: We are in the middle of a very challenging Budget process. It's going to be a tough Budget. We have to make serious, tough decisions. We've naturally been working on the health reform process for some months, and, all along, we've been aware of the fact that, inevitably, that would involve some additional resources for the health sector. These, of course, have been announced as part of the negotiations with the states and territories about reforming our health system. And along with other new spending, these items of new spending do have to be covered by savings. Our commitments are to ensure that we get the Budget back to surplus as quickly as possible, that we restrain spending growth to two per cent in real terms until the Budget returned to surplus and that new spending is offset by savings. That is going to involve some tough decisions. It means that unlike … under Mr Howard, you won't see a - an election year Budget full of giveaways and full of politically-driven spending that's designed to appeal to particular groups of people who are politically significant. You're going to see a tough Budget, but a Budget that will be about investing for Australia's long-term future. A Budget that's going to be about wealth creation, a Budget that's going to be about laying the foundations for getting full value for money from the spending that taxpayers contribute to our collective well-being.
QUESTION: Are you concerned that this IMF report and the growth rates will put upward pressure on - sorry, will put pressure on the RBA to lift interest rates?
LINDSAY TANNER: The Reserve Bank is an independent body, of course, which makes its own decisions and reports publicly about its decisions on interest rates. In recent times, it has moved interest rates upward away from wit… what it has described as emergency settings. We'll all recall some time ago sudden dramatic drops in interest rates as a result of the global financial crisis. The Reserve Bank, of course, has now a number of times moved interest rates up to return the interest rate settings to something that is normal, rather than the emergency low settings of some time ago. It's ultimately a decision for the Reserve Bank what call they make on interest rates at any point in the future. But I don't believe that our Budget settings will, at any point, put upward pressure on interest rates, and we are working very hard to ensure that we get the Budget back to surplus as quickly as possible. That is the key focus of this Budget process, to get the Budget settings back to surplus, to pay down debt as quickly as possible, and to lay the foundations for Australia's prosperity into the future.
QUESTION: Do you think then you'll have to make cuts to the public service to make these savings in the Budget?
LINDSAY TANNER: In the last five or six years of John Howard, the number of public servants in the Federal Government soared. It increased dramatically. And a number of people in the fat cat level, the senior executive service - or SES - really went through the roof. We have stabilised those numbers. We have no specific agenda, no plan to cut overall public service numbers. We certainly intend to make sure they don't return to the days of rapid growth under Mr Howard. But our focus will always be on getting better efficiency and on getting better targeted programs. That inevitably means that there'll be changes upward and downward in particular agencies. That's always going to be the case. So if you look across the last couple of years, you'll see, as a result of our Budgets, there have been parts of the public service that have grown a bit, other parts that have reduced a bit. The overall picture though has been relatively stable. We have no agenda to slash public service jobs. We have no intention of targeting public service jobs, but we certainly are going to make sure that we don't return to the days of rapid, unsustainable growth in the public service that we inherited from Mr Howard.
QUESTION: Has the Government decided to cancel its replacement insulation scheme?
LINDSAY TANNER: I note the speculation in sections of the media this morning along those lines. Obviously, I'm not in a position to talk about decisions that have been made or any discussions that may have occurred in Cabinet about any matter, whether about the insulation program or any other matter, so I'm certainly not going to comment on any of these things. Our focus is resolutely to tackle the problems that have emerged in the original program, and to make sure that all of the risks are dealt with, and that the circumstances are sorted out. That's what we're focused on. I'm not going to respond to speculation about - I note that there are different kinds of speculation: one saying delay, one saying end the program. I'm not going to respond to those kinds of speculation. Any announcements the Government makes about its approach to dealing with this overall issue of encouraging insulation in our homes across the country will, of course, be made by the appropriate minister whenever they are required. But I'm not going to discuss Cabinet decisions or Cabinet deliberations, even speculate on Cabinet deliberations that may not have occurred.
QUESTION: But, obviously, the IMF report, the high growth [indistinct] makes it easier for the Government to justify cutting spending in some of these stimulus spending areas, and do you think that perhaps some of these schemes will be slowed and the insulation scheme is one of those?
LINDSAY TANNER: I'm certainly not going to make any comment about the outlook for the Government subsidising insulation in homes. I'm not going to respond to that speculation. And the same applies with respect to any other theoretical possibility that may be floated about the Budget. People will just have to wait and see what decisions will be made in the Budget. All I can repeat again is that we face some very tough choices, and we do have to find serious savings. It is now seven years since the last Liberal Treasurer, or Shadow Treasurer, put forward serious savings proposals. Seven years since the last Liberal Finance Minister, or Shadow Finance Minister, put forward serious savings proposals. The last four Howard budgets had no substantial savings initiatives and over the almost three years, two and a half years that the Liberal Party had been in opposition, we had three shadow treasurers, five shadow finance ministers and not a single detailed savings initiative between any of them. It's high time. If they want to convince the Australian people that they are fit to govern, that they are a genuine alternative government, and instead of just frothing at the mouth about debt and deficit, they actually put forward some proposals about how they intend to strengthen the budget position. So far they have done absolutely nothing. It's the Government that's actually doing the hard work and yes, that does involve tough choices, but I'm not going to speculate later on what the content of those choices might be.
QUESTION: What do you think of Tony Abbott's suggestion that unemployed people aged up to 30 shouldn't be eligible to receive the dole?
LINDSAY TANNER: Mr Abbott has now established a clear pattern of throwing out one-liners and thought bubbles without any detail, any costing, any serious analysis, and then walking away from them, so he manages to get a headline, but there's no substance, there's no clear plan, and immediately he's got his headline, he then walks away from it. We have got no idea what he stands for, no idea what his plan for Australia is, no idea what his policy on the Australian economy is, on the future of our health system is, on the future of our education system is. Mr Abbott is simply engaged in random sniping and throwing bombs and creating thought bubbles. That's not a way to govern the country. It might get him a headline, it might help him get his picture in the paper when he's riding his bike, it's not a plan for Australia's future.
QUESTION: Putting Mr Abbott aside though, what do you think of the general proposition that unemployed people aged under 30 should not be eligible for the dole?
LINDSAY TANNER: The Government's already got in place a rigorous learn or earn plan for young people where the onus is on young people who are unemployed to either be in training or working, or in employment, and that plan is there to ensure that we don't have people abusing the system, misusing the system. It's easy for Tony Abbott to throw around suggestions that people should move to the other side of the country, but if you're a young person with family connections, without assets and without any connections in other parts of the country, that's a pretty difficult thing to do. It's not something you can just do successfully without quite a lot of thought and planning and indeed, significant money, so the suggestion that Mr Abbott has thrown out is simply a one liner for the newspapers. It's designed to get a headline, but there's nothing underneath it. There is no substance, there is no plan, there is no costing and there is no wider plan for the future of Australia's economy. All you've got is a headline but nothing underneath it.
QUESTION: US SEC is looking at BHP Billiton and possible corruption there. Is that something the Australian Government or regulators should look at?
LINDSAY TANNER: Look, I'm not aware of the SEC's considerations in this regard, so I can't really comment on the specifics. We, of course, as do many other countries, have companies headquartered this country that have operations all around the world, have activities all around the world, of course most famously, although Rio is predominantly a British company, it's obviously very substantial Australian, and you put most famously recently, you've had the case with Stern Hu. Basically the Australian Government's view is that the primary issue here is that companies that do have an Australian connection or an Australian headquarters should abide by the law of whatever country it is that they are operating in, but it's ultimately a matter for that country and its law enforcement agencies and its regulators to determine whether or not that's occurring and to apply their laws. It's not the Australian Government's role to be seeking to enforce the laws of other countries. It's ultimately a matter for those countries to make those decisions and so I'm not in a position to comment about anything specific with respect to BHP Billiton, because I'm not aware of the details of any considerations that may be occurring.
QUESTION: We're also waiting to hear about the Government Travel Services tender. There seems to have been - we've been expecting it for a few months. When can we expect some news and why the hold-up?
LINDSAY TANNER: I would expect that there will be an announcement on that matter very soon. We are working through the final details of the proposition. Obviously, it's a matter that I'm ultimately in charge of. I've been working closely with my department on the tender process, and I would expect that we'll be announcing the outcome of that very soon. I can't give you a precise date, but certainly it's something that I'm expecting will be very soon.
Thank you very much, folks.
-ends-
| Media Contact: | Website: |
|---|---|
| Nardia Dazkiw - 0418 144 690 | www.financeminister.gov.au |
